"prickly", "thorny", "stinging", extremely difficult, can be dangerous to touch, hold, or handle. If he is a cactus in the morning, maybe it's his beard, or maybe it's his disposition. Emotions can be touchy, sensitive, and the expression "He's a Cactus in the morning" does not have a positive connotation.
I have never heard this expression used in conversations in California except to refer to needing a shave. He has a "five o'clock shadow". He needs to shave.
Good Q!